Finance Act, 1919

Tax on income from converted Government securities.

25. Where the income which any individual is required under the Income Tax Acts to include in a statement of his total income from all sources for the purposes of income tax or super-tax for any year includes both—

(i) interest received without deduction of income tax in respect of securities (in this section referred to as “original securities”) which have been accepted as the equivalent of cash in payment for fully-paid allotments of Four Pounds per Cent. Victory Bonds or Four Pounds per Cent. Funding Loan, 1960–90 (in this section referred to as “substituted securities”); and

(ii) interest taxed by deduction in respect of such substituted securities;

and the amount of the interest so included exceeds the full amount of the interest for a complete year on the original securities; then, if that individual so requries, the excess—

(a) shall not be taken into account in ascertaining the total income from all sources of that individual for that year for the purposes of income tax or super-tax; but

(b) shall nevertheless be chargeable toincome tax or super-tax for that year at such rate or rates and subject to such reliefs, if any, as would be applicable if such excess constituted the highest part of an income equal in amount to the amount of the total income of that individual exclusive of such excess.